Down trend in commodities helps Indian economy
The down trend in commodities is being seen as a good sign for the Indian economy as it reduces deficits on gold and crude oil trades to some extent.
India's trade deficit from $13.5 billion in March 2012 to $10.3 billion in March this year; while the benchmark index BSE SENSEX crossed the psychological mark of 19,000, and Nifty jumped to its highest in the month to
5783.10 last week.
Decline in gold and crude oil prices added to market optimism, as lowers prices in the international prices slashed the country's current account and fiscal deficits.
Bank of America-Merrill Lynch said, "The downtrend in commodities is clearly a good sign for the economy, as it eases risks on the twin deficits to some extent. We continue to have a mix of rate-sensitives such as autos, banks, and defensives like pharma in our model portfolio."
Sanjeev Zarbade, of Kotak Securities, said decline in fears of political uncertainty helped the market enjoy a sharp rally during the past week.
While analysts expect auto companies to report slight or no increase in margins for the March quarter, banking sector is expected to post a considerable improvement in results.
Banking giants ICICI and HDFC as well as auto players like Hero MotoCorp and Maruti Suzuki are likely to announce their quarterly results this week.